easyJet boardroom resolves spat with Stelios

27th Jul 2009

The long-running public battle between the easyJet founder Stelios Haji-Ioannou and the boardroom over the budget airline’s expansion plans is expected to have reached a compromise.

At a shareholder’s meeting on Wednesday, easyJet is expected to confirm that Sir Stelios is comfortable with its new plans. The plans are understood to involve swapping some newly bought planes with older ones acquired last year through the purchase of GB Airways.

The move is expected to put an end to the eight-month spat sparked by Haji-Ioannou opposing plans to acquire 91 Airbus aircraft over the next four years in the midst of a recession. The row intensified in May, when easyJet reported that first-half losses had more than doubled.

According to The Times the airline, which is 38 per cent owned by the Haji-Ioannou family, is expected to say that it will expand its fleet by 5-10% annually, a slower rate of growth than it has reported in recent years.

It is understood that the delivery of some aircraft will also be postponed in response to Sir Stelios’s concerns. Andy Harrison, chief executive, had previously delayed orders for six jets at the end of last year in an apparent concession to Sir Stelios’s demands.

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Underlying losses at easyJet widened to £130 million due to growing fuel costs, despite a 2.9% rise in passenger numbers to 19.4 million and an increase in revenue to £1 billion.

Relations between easyJet and Sir Stelios are understood to have improved after Sir Colin Chandler stepped down early as chairman in May. He was replaced by Sir David Michels on an interim basis. Sir Michael Rake, the former head of BT, joined the board as deputy chairman but is expected to take the helm eventually.